If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company: High price Low price: EPS Year 1. $62.18 40.30 2.35 a. High target price. b. Low target price Year 21 $ 67.29 43.18 Year 31 $74.18 39.27 2.73 Earnings are expected to grow at 9 percent over the next year. o. What is the high target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the low target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. D Year 4. $78.27 46.21 2.89
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company: High price Low price: EPS Year 1. $62.18 40.30 2.35 a. High target price. b. Low target price Year 21 $ 67.29 43.18 Year 31 $74.18 39.27 2.73 Earnings are expected to grow at 9 percent over the next year. o. What is the high target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the low target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. D Year 4. $78.27 46.21 2.89
Chapter13: Direct Foreign Investment
Section: Chapter Questions
Problem 1IEE
Related questions
Question
![If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio,
we have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year.
Suppose we have the following information on a particular company.
Year 1
$ 62.18
40.30
2.35
a. High target price
b. Low target price
Year 2
$67.29
43.18
2.58
Year 3-
$74.18
39.27
2.73
Year 4
$78.27
46.21
High price
Low price
EPS
Earnings are expected to grow at 9 percent over the next year.
6. What is the high target stock price in one year?
32.16.
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g..
b. What is the low target stock price in one year?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
2.890](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7111bd9f-157b-49ea-822e-a545513e6e93%2Fd39912c5-7a92-425f-849f-edd49ce691aa%2Fpcghurj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio,
we have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year.
Suppose we have the following information on a particular company.
Year 1
$ 62.18
40.30
2.35
a. High target price
b. Low target price
Year 2
$67.29
43.18
2.58
Year 3-
$74.18
39.27
2.73
Year 4
$78.27
46.21
High price
Low price
EPS
Earnings are expected to grow at 9 percent over the next year.
6. What is the high target stock price in one year?
32.16.
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g..
b. What is the low target stock price in one year?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
2.890
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